Paraguay bank collapse storm spreads, Brazilian media pays attention

The takeover of Ueno Bank in Paraguay has triggered the most severe financial and political crisis in recent years. President Penha has announced his resignation, and Congress has entered impeachment proceedings. It not only affects about 3 million customers, but also affects Brazilian people doing business and buying property locally. The Brazilian media is paying close attention to it.

Brazil's G1 and other media reported that the Central Bank of Paraguay announced on the 3rd that it would intervene in the digital bank Ueno Bank because the bank's solvency index had fallen below half of the legal minimum standard. The regulatory agency pointed out that after adjusting the financial report, it was found that there were major problems with the bank's capital and asset quality.

The report pointed out that Ueno Bank manages approximately US$850 million in public sector funds, including pension fund assets such as Paraguay’s Social Security Institution (IPS). The opposition questioned that the huge loans provided by banks to affiliated companies of the holding group involved the transfer of interests and regulatory failures.

The incident quickly turned into a political crisis. Paraguayan President Santiago Peña once held shares in the Vázquez Group, which controlled Ueno, until March 2025 when he withdrew. As doubts about conflicts of interest and regulatory oversight increased, Penia announced his resignation after the crisis broke out, and Congress launched impeachment proceedings. Carlos Carvallo, president of the Central Bank of Paraguay, has also resigned, and a number of current and former bank executives have been investigated or arrested.

Many Brazilian media compared the Ueno case to the Brazilian Master Bank that was disposed of in 2025. Both cases involve related-enterprise transactions, asset quality disputes, exposure of public funds, and whether regulatory agencies intervene in a timely manner.

However, analysis pointed out that there are still obvious differences between the two incidents. The Master case mainly focused on credit asset transactions that were suspected to be fictitious or lacked actual guarantees; the Ueno case focused on issues of lending to affiliated enterprises, asset registration and solvency. Ueno, on the other hand, has about 3 million customers, equivalent to nearly half of Paraguay's population, and the impact is wider.

The crisis has also affected Brazilians living in Paraguay, with some losing more than the maximum amount guaranteed by the deposit insurance fund, and some unable to withdraw savings originally reserved for vacations. At present, the maximum protection amount of the Paraguay Deposit Insurance Fund is 228.3 million guarani (approximately NT$1.215 million). The excess amount must wait for subsequent disposal by financial institutions and judicial procedures.

Some business owners said that the bank's takeover affected daily working capital allocation and cross-border trade settlement. Outsiders are worried that this crisis may further impact confidence in Paraguay's financial system and foreign investment environment. (Editor: Chen Huiping)